Just uploaded a Maya and Terragen scene based on your heightmap. Terragen is a gathered project so if you work out of the downloaded directory all the paths should be relative. If it doesn't work for any reason, just re-point the paths (for the heightfield for example) to the correct directory on your disk.

There is also an update to Terraman which includes the Boolean function - just replace all the files in the installation.

I made a micro export of your entire terrain and loaded into Maya with Terraman.

Then created a Projection camera - close_Projection_cam, selected the imported terrain and the projection camera and used Boolean Mesh from Projection camera to cut a hole out of the terrain that was close to the render camera.

I could then export that projection camera to Terragen and used it to render that smaller patch of terrain using the Bake Micro Close render node.

Re-import that .obj back into Maya to give a much higher-rez terrain that fills the hole made by the boolean.

Didn't include this mesh to keep the upload file size down, but try it on your machine.

To get even higher resolution I then created a 3 x 3 tile of the close patch of terrain - again you can try baking these 9 tiles out using the Bake Micro Tiled x 9 render node -

Just use Render Sequence on the render node to bake the sequence of obj files.

Quick question. I am trying to batch clean my newly made obj files in TerraMan and I keep getting a failed to load error (specified module could not be found.) This is the first time running into this specific problem and I am wondering if it is related to your update?

I was at the batch step in TerraMan to clean up (terrain_clean.mlx) the obj files that were created in Terragen and the create the Udims. Once it is finished processing I will reload the new version again and try to run it.